What types of investments should risk-adverse elderly investors consider utilizing for safe returns?

For risk-adverse elderly parents, and considering interest rates on the rise, what would be some alternatives to bank CDs? Some options I am considering are broker CMAs and premium money market funds that would not lock the money for periods of time like a CD, but with lower returns. However, another concern would be insurance in case of a banking issue or crisis — could SIPC or FIDC be counted on for such scenarios? There are also US government bonds, notes, and bills that would have some better safety, and corporate bonds would return more, though at a higher risk. There are dividend stocks, though those also have risk of cost basis decline. Are any of these types of investments more recommended over others for risk-adverse elderly investors? Are there are other types of investments we should be considering?

Banking, Bonds / Fixed Income, Choosing an Advisor, Stocks, Insurance
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4 days ago

You are on the right track; a lot depends upon your income bracket, age, and other considerations.  One very good choice today is two-year U.S. Treasuries which are paying almost 3% and where the interest is completely free of state and local income taxes.  You can purchase these at treasurydirect.gov.  You can also purchase shorter-dated U.S. Treasuries which pay somewhat less but the money isn't tied up for two years.

I would avoid corporate bonds, dividend stocks, and other assets with fluctuating values.  Risk-averse people will tend to sell these whenever they are lowest and buy them when they are highest, so they are best avoided in favor of true risk-free assets which pay around 3%.

6 days ago
2 weeks ago